Brij Raj vs Raja Ram

A. Srinivasachari, J.—This is a second appeal against the judgment of the Dist. Judge, Aurangabad, dismissing the Plaintiff''s suit on the ground that the promissory note on which he based his suit was inadmissible in evidence for want of proper stamp and that, therefore, his suit for the recovery of the amount on the promissory note was liable to be dismissed. The Plaintiff who is the Appellant before me filed a suit for the recovery of a sum of O.S. Rs. 701/- as being the amount due from the Defendant.

He alleged that the Defendant borrowed from him the aforesaid sum agreeing to repay the same with interest at 12 annas per cent, per menses and that he also executed a pronote in his favour on 29-3-1950. The Defendant denied that he had borrowed any amount from the Plaintiff and also stated that the suit promissory note was not executed by him.

A further plea was raised that the promissory note being one for Rs. 701/- required a stamp of annas 2 and as there was only one anna affixed on it, it was inadmissible in evidence and therefore no amount could be recovered on the basis of a document which was inadmissible in evidence.

There were other pleas also raised viz., that the Plaintiff was a money-lender and that ho did not conform to the provisions of Section 5 of the Money Lenders Act. The Plaintiff produced the suit promissory note and also the licence relating to his business as the money lender. He examined three witnesses. The Defendant also examined three witnesses. The trial Court on the evidence, of P.W. 2 held that the execution of the suit promissory note by the Defendant had been proved. The document was also sent to the hand-writing expert who gave his opinion in favour of the Plaintiff.

The trial Court, therefore, held that the promissory note was executed by the Defendant but on the question as to whether the suit could be decreed on an insufficiently stamped promissory note it hold against the Plaintiff. The ground urged was that the plaint disclosed only one transaction which had been embodied in the pro-note and inasmuch as there was no separate transaction of the loan apart from the promissory note and the promissory note having become inadmissible in evidence the suit could not be decreed.

On appeal the lower appellate Court rest content with giving its finding on the question of the admissibility of the document and dismissed the appeal. The District Judge in his judgment agreed with the trial Court and there were no two distinct causes of action and as such the Plaintiff could not be allowed to rely upon any cause of action other than the execution of the promissory note. It is against this judgment that the Plaintiff has come up in appeal.

The first argument advanced by the learned advocate for the Appellant was that the suit promissory note having once been admitted in evidence by the trial Court it was no longer open to the other side to object to the admissibility of the document having regard to the provisions of Section 34 of the Hyd. Stamp Act.

He urged further that even if it be assumed that the promissory note was inadmissible in evidence the Plaintiff was entitled to fall back upon the original cause of action and therefore the Courts were wrong in not permitting the Plaintiff to amend his plaint so as to make the advancing of the loan as the cause of, action. It has to be observed that Section 34-is mandatory in that it does not allow the question of the admissibility of a document being-raised once it had been admitted in evidence.

The crucial question, therefore, is whether in the circumstances of this case there has been an admission of the promissory note within the meaning of Section 34 of the Hyd. Stamp Act. The words "admitted in evidence'''' mean the act of letting the document in as part of the evidence. The promissory note was allowed to be filed and an objection raised of its being insufficiently stamped and the, Court proceeded to levy stamp duty and penalty on the same which was quite against law.

It would, appear that the document was before the Court and the Court applied its judicial mind and allowed the document to be admitted in evidence on payment of the deficit stamp, duty and penalty. Ex. 1, the suit promissory note was pull to P.W. 1 and he identified the signature of the Defendant on the document. It would therefore appear that the document was as a matter of fact admitted in evidence in that it was put to the witness and proved.

Secondly it may be observed that the document was sent to the hand-writing expert for comparison of the signature on the admitted document with the disputed signature on the promissory note. The Defendant applied to the Court for the document being sent to Anr. hand-writing expert. This is evident from the proceedings of 27th April 1953. This at any rate would show that the document was admitted in evidence.

It was urged on behalf of the advocate for the Respondent that the admission of a document as contemplated by Section 34 of the Stamp Act meant an admission by the Judge after he had applied his judicial mind to the document. The mere production of the document and the witness being asked about it would riot amount to the Judge having applied his judicial mind. I do not think there is any force in this argument.

What more is required than the document being produced in Court, put to the witness and his identification of the signature taken? The referred to proceedings in the foregoing paragraph were before the Munsiff and he recorded the evidence. The witness P.W. 1 looked at the document and stated that it bore the signature of the Defendant What the Court would look to in such cases is as to whether the Judge has in accordance with the provisions of Order 13, Rule 4, CPC made the endorsement of the admission of the document in evidence and has not, made any endorsement to say that the document is rejected as being inadmissible in evidence.

The document in this case has been marked as Exhibit and it has been referred to in the judgment of the Munsiff. This in my opinion would amount to a conscientious application of the mind of the Judge to the document in question. If there has-been an application of the mind of the Judge to the document it must be regarded as having been admitted under the law. In two of the cases decided by the Madras High Court, in the case of N.M.S. Sadasivier Krishnier Estate and Others Vs. T.S. Meenakshi Iyer and Others, , the learned Judge observed that no occasion had arisen for the Court to look at the document and therefore no question of admissibility ever arose. In the other case of Attili Venkanna Vs. Parasuram Byas trading under the name of Parasuram Doulatram and Others, , it was not clear whether the Judge or/the clerk of the Court placed the rubber stamp containing the initials of the Judge on the document.

Under those circumstances it was held that there was no conscientious application of the judicial mind of the Judge and therefore it would not be said that the document was admitted in evidence-I have cited these cases in order to show that where a document has been put to the witness and the witness has identified the signature on the document and further the judge has relied upon the statement of this witness as well as upon the document it could loot be said that there was no application of the judicial mind.

In my view, therefore, the suit promissory note must be held to have been admitted by the trial Court and it is no longer open to the Defendant to raise the question of its admissibility in view of the provisions of Section 34 of the Hyd. Stamp Act.

As I have pointed out above, both the trial Judge and the Dist. Judge have proceeded upon the assumption that the document was inadmissible ;in evidence and as such the whole transaction being one the Plaintiff could not be allowed to fall back on the original cause of action. This point also was argued by the advocates and I think that I might express my opinion upon this aspect, also. There has been a Hood of authority on this subject commencing from Sheik Akbar v. Sheikh Khan ILR Cal 256 (C). Suffice it to discuss the vital aspect of the matter.

A promissory note in relation to a loan transaction furnishes evidence of the loan but it must be observed that by recording the terms of the loan it does not operate as a payment of the loan cither absolutely or conditionally as the case may be. If for some reason the document viz., the promissory note goes out of the case, no doubt the Plaintiff suffers loss of evidence and foregoes the presumption arising under the law but the loan transaction of which the promissory note was that evidence does not thereby get destroyed. T would herein quote Chitty on Contracts, 16th Edn. p. 652.

The contract of loan of money is a simple contract not necessarily requiring writing.... In most cases the lender takes an acknowledgment in writing from the borrower in the form of ''I.O.U.'' or a promissory note or a bond.... if there is a promissory note he will during the currency of the note be estopped to sue otherwise than in accordance with its terms but after it has become due he can sue on the note and add a claim for money " lent and the promissory note may be used as evidence in support of the money lent." There cannot be a more clear exposition of the position of the law than what has been '' stated above. It might be useful to refer to Anson''s Law of Contract wherein the learned author says:

The presumption where a negotiable instrument is taken in lieu of money payment is that the parties intended it to be a conditional discharge Only." � Anson''s Law of Contract, 18th Edn. page 327.

In the leading case of Sadashuk Jankidas v. Sir Kishen Pershad 46 Ind App 33 : AIR 1918 PC 146 (D). Lord Buckmaster who delivered the judgment of the Board observed:

It would of course have been open to the Plaintiffs had they thought fit to have framed their ease in an alternative form and to have sued both on the hundies and alternatively upon the consideration. In this case the hundies could not be proved.

The trend of authorities therefore leads to this principle that in a contemporaneous promissory note with loan there is a presumption of conditional payment. The fact that the loan and the promissory note are contemporaneous does not rule out the payee from proving the existence of an obligation to pay the amount advanced as a loan. It may also be observed that merely because the advancing of the loan a ad the execution of the promissory note are contemporaneous this circumstance does not necessarily negative the inference that the promissory note was executed as a collateral security or by way of conditional payment and it is clear that if a promissory note has been given by way of collateral security or conditional payment a suit would lie on the debt apart from the promissory note.

The plaint in this case would show that the Plaintiff alleged that the Defendant borrowed a sum of Rs. 701/- agreeing to repay the same with interest at 12 annas per cent, per month and he further states that he executed a promissory note. The plaint allegation, therefore, in my opinion clearly says that the suit was based on the transaction of loan.

I am therefore of the opinion that both the Courts were wrong in dismissing the Plaintiff''s suit en the preliminary ground that the document, the suit promissory note was inadmissible in evidence. I may point out that the trial Court was wrong in levying stamp duty and penalty on a promissory note which was insufficiently stamped. I should have allowed the Plaintiff to amend his plaint in this Court alone under Order 6, Rule 17, CPC but inasmuch as the lower appellate Court has not gone into the merits and given his finding, as regards the advancing of, the loan, it is necessary that the case should be sent back to the Dist. Judge, Aurangabad directing him to allow the Plaintiff to amend his plaint.

I, therefore, allow this appeal, set aside the judgment of the Court below and remand the case to the Dist. Judge with the direction that the Plaintiff be permitted to apply for amending the plaint and after giving an opportunity to the other side to file his written statement to the amended plaint and giving an opportunity to the parties to lead evidence ho should decide the case according to law, Costs of this appeal will abide the result.